Prepare production department’s planning budget. Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

Question

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Answer 1

Question

Chapter 9, Problem 9.15E

1.

To determine

Prepare production department’s planning budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

1.

Expert Solution

Answer to Problem 9.15E

The production department’s planning budget is $254,500

Explanation of Solution

Prepare production department’s planning budget

Particulars	Amount

Budget labor hours (a)	8000 hours
Direct labor ($15.80(a))	$126,400
Indirect labor ($8,200+($1.60×(a)))	$21,000
Utilities ($6,400+($0.80×(a)))	$12,800
Supplies ($1,100+($0.40×(a)))	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$52,600
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$26,900

Total expenses	$254,500

2.

To determine

Prepare production department’s flexible budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

2.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget is $264,180

Explanation of Solution

Prepare production department’s flexible budget

Particulars	Amount

Actual labor hours (a)	8400 hours
Direct labor ($15.80(a))	$132,720
Indirect labor ($8,200+($1.60×(a)))	$21,640
Utilities ($6,400+($0.80×(a)))	$13,120
Supplies ($1,100+($0.40×(a)))	$4,460
Equipment depreciation ($23,000+($3.70×(a)))	$54,080
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$27,660

Total expenses	$264,180

3.

To determine

Prepare production department’s flexible budget performance report, including both spending and activity variances.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

3.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget performance report shows the net revenue and spending variances is $1,310(U) and activity variance is $9,680(U)

Explanation of Solution

Prepare flexible budget performance report.

Particulars	Actual results	Spending variances	Flexible budget	Activity variances	Planning budget

Labor hours (a)	8400 hours		8400 hours		8000 hours
Direct labor ($15.80(a))	$134,730	$2,010(U)	$132,720	$6,320(U)	$126,400
Indirect labor ($8,200+($1.60×(a)))	$19,860	$1,780(F)	$21,640	$640(U)	$21,000
Utilities ($6,400+($0.80×(a)))	$14,570	$1,450(U)	$13,120	$320(U)	$12,800
Supplies ($1,100+($0.40×(a)))	$4,980	$520(U)	$4,460	$160(U)	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$54,080	$0	$54,080	$1,480(U)	$52,600
Factory rent	$8,700	$330(U)	$8,400	$0	$8,400
Property taxes	$2,100	$0	$2,100	$0	$2,100
Factory administration (11,700+($1.90×(a)))	$26,470	$1,190(F)	$27,660	$760(U)	$26,900

Total expenses	$265,490	$1,310(U)	$264,180	$9,680(U)	$254,500

4.

To determine

Aspects of flexible which should be brought to management’s attention.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

4.

Expert Solution

Answer to Problem 9.15E

The unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 are major concern of the management.

Explanation of Solution

The computation of unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 this made the management more concerned about the changes in the values. As variance is the difference in value which arises when actual figure and estimated or budgeted figure occurs major difference.

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Answer 2

Question

Chapter 9, Problem 9.15E

1.

To determine

Prepare production department’s planning budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

1.

Expert Solution

Answer to Problem 9.15E

The production department’s planning budget is $254,500

Explanation of Solution

Prepare production department’s planning budget

Particulars	Amount

Budget labor hours (a)	8000 hours
Direct labor ($15.80(a))	$126,400
Indirect labor ($8,200+($1.60×(a)))	$21,000
Utilities ($6,400+($0.80×(a)))	$12,800
Supplies ($1,100+($0.40×(a)))	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$52,600
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$26,900

Total expenses	$254,500

2.

To determine

Prepare production department’s flexible budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

2.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget is $264,180

Explanation of Solution

Prepare production department’s flexible budget

Particulars	Amount

Actual labor hours (a)	8400 hours
Direct labor ($15.80(a))	$132,720
Indirect labor ($8,200+($1.60×(a)))	$21,640
Utilities ($6,400+($0.80×(a)))	$13,120
Supplies ($1,100+($0.40×(a)))	$4,460
Equipment depreciation ($23,000+($3.70×(a)))	$54,080
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$27,660

Total expenses	$264,180

3.

To determine

Prepare production department’s flexible budget performance report, including both spending and activity variances.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

3.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget performance report shows the net revenue and spending variances is $1,310(U) and activity variance is $9,680(U)

Explanation of Solution

Prepare flexible budget performance report.

Particulars	Actual results	Spending variances	Flexible budget	Activity variances	Planning budget

Labor hours (a)	8400 hours		8400 hours		8000 hours
Direct labor ($15.80(a))	$134,730	$2,010(U)	$132,720	$6,320(U)	$126,400
Indirect labor ($8,200+($1.60×(a)))	$19,860	$1,780(F)	$21,640	$640(U)	$21,000
Utilities ($6,400+($0.80×(a)))	$14,570	$1,450(U)	$13,120	$320(U)	$12,800
Supplies ($1,100+($0.40×(a)))	$4,980	$520(U)	$4,460	$160(U)	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$54,080	$0	$54,080	$1,480(U)	$52,600
Factory rent	$8,700	$330(U)	$8,400	$0	$8,400
Property taxes	$2,100	$0	$2,100	$0	$2,100
Factory administration (11,700+($1.90×(a)))	$26,470	$1,190(F)	$27,660	$760(U)	$26,900

Total expenses	$265,490	$1,310(U)	$264,180	$9,680(U)	$254,500

4.

To determine

Aspects of flexible which should be brought to management’s attention.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

4.

Expert Solution

Answer to Problem 9.15E

The unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 are major concern of the management.

Explanation of Solution

The computation of unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 this made the management more concerned about the changes in the values. As variance is the difference in value which arises when actual figure and estimated or budgeted figure occurs major difference.

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Answer 3

Question

Chapter 9, Problem 9.15E

1.

To determine

Prepare production department’s planning budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

1.

Expert Solution

Answer to Problem 9.15E

The production department’s planning budget is $254,500

Explanation of Solution

Prepare production department’s planning budget

Particulars	Amount

Budget labor hours (a)	8000 hours
Direct labor ($15.80(a))	$126,400
Indirect labor ($8,200+($1.60×(a)))	$21,000
Utilities ($6,400+($0.80×(a)))	$12,800
Supplies ($1,100+($0.40×(a)))	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$52,600
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$26,900

Total expenses	$254,500

2.

To determine

Prepare production department’s flexible budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

2.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget is $264,180

Explanation of Solution

Prepare production department’s flexible budget

Particulars	Amount

Actual labor hours (a)	8400 hours
Direct labor ($15.80(a))	$132,720
Indirect labor ($8,200+($1.60×(a)))	$21,640
Utilities ($6,400+($0.80×(a)))	$13,120
Supplies ($1,100+($0.40×(a)))	$4,460
Equipment depreciation ($23,000+($3.70×(a)))	$54,080
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$27,660

Total expenses	$264,180

3.

To determine

Prepare production department’s flexible budget performance report, including both spending and activity variances.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

3.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget performance report shows the net revenue and spending variances is $1,310(U) and activity variance is $9,680(U)

Explanation of Solution

Prepare flexible budget performance report.

Particulars	Actual results	Spending variances	Flexible budget	Activity variances	Planning budget

Labor hours (a)	8400 hours		8400 hours		8000 hours
Direct labor ($15.80(a))	$134,730	$2,010(U)	$132,720	$6,320(U)	$126,400
Indirect labor ($8,200+($1.60×(a)))	$19,860	$1,780(F)	$21,640	$640(U)	$21,000
Utilities ($6,400+($0.80×(a)))	$14,570	$1,450(U)	$13,120	$320(U)	$12,800
Supplies ($1,100+($0.40×(a)))	$4,980	$520(U)	$4,460	$160(U)	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$54,080	$0	$54,080	$1,480(U)	$52,600
Factory rent	$8,700	$330(U)	$8,400	$0	$8,400
Property taxes	$2,100	$0	$2,100	$0	$2,100
Factory administration (11,700+($1.90×(a)))	$26,470	$1,190(F)	$27,660	$760(U)	$26,900

Total expenses	$265,490	$1,310(U)	$264,180	$9,680(U)	$254,500

4.

To determine

Aspects of flexible which should be brought to management’s attention.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

4.

Expert Solution

Answer to Problem 9.15E

The unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 are major concern of the management.

Explanation of Solution

The computation of unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 this made the management more concerned about the changes in the values. As variance is the difference in value which arises when actual figure and estimated or budgeted figure occurs major difference.

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Answer 4

Question

Chapter 9, Problem 9.15E

1.

To determine

Prepare production department’s planning budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

1.

Expert Solution

Answer to Problem 9.15E

The production department’s planning budget is $254,500

Explanation of Solution

Prepare production department’s planning budget

Particulars	Amount

Budget labor hours (a)	8000 hours
Direct labor ($15.80(a))	$126,400
Indirect labor ($8,200+($1.60×(a)))	$21,000
Utilities ($6,400+($0.80×(a)))	$12,800
Supplies ($1,100+($0.40×(a)))	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$52,600
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$26,900

Total expenses	$254,500

2.

To determine

Prepare production department’s flexible budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

2.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget is $264,180

Explanation of Solution

Prepare production department’s flexible budget

Particulars	Amount

Actual labor hours (a)	8400 hours
Direct labor ($15.80(a))	$132,720
Indirect labor ($8,200+($1.60×(a)))	$21,640
Utilities ($6,400+($0.80×(a)))	$13,120
Supplies ($1,100+($0.40×(a)))	$4,460
Equipment depreciation ($23,000+($3.70×(a)))	$54,080
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$27,660

Total expenses	$264,180

3.

To determine

Prepare production department’s flexible budget performance report, including both spending and activity variances.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

3.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget performance report shows the net revenue and spending variances is $1,310(U) and activity variance is $9,680(U)

Explanation of Solution

Prepare flexible budget performance report.

Particulars	Actual results	Spending variances	Flexible budget	Activity variances	Planning budget

Labor hours (a)	8400 hours		8400 hours		8000 hours
Direct labor ($15.80(a))	$134,730	$2,010(U)	$132,720	$6,320(U)	$126,400
Indirect labor ($8,200+($1.60×(a)))	$19,860	$1,780(F)	$21,640	$640(U)	$21,000
Utilities ($6,400+($0.80×(a)))	$14,570	$1,450(U)	$13,120	$320(U)	$12,800
Supplies ($1,100+($0.40×(a)))	$4,980	$520(U)	$4,460	$160(U)	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$54,080	$0	$54,080	$1,480(U)	$52,600
Factory rent	$8,700	$330(U)	$8,400	$0	$8,400
Property taxes	$2,100	$0	$2,100	$0	$2,100
Factory administration (11,700+($1.90×(a)))	$26,470	$1,190(F)	$27,660	$760(U)	$26,900

Total expenses	$265,490	$1,310(U)	$264,180	$9,680(U)	$254,500

4.

To determine

Aspects of flexible which should be brought to management’s attention.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

4.

Expert Solution

Answer to Problem 9.15E

The unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 are major concern of the management.

Explanation of Solution

The computation of unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 this made the management more concerned about the changes in the values. As variance is the difference in value which arises when actual figure and estimated or budgeted figure occurs major difference.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 9.15E

1.

To determine

Prepare production department’s planning budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

1.

Expert Solution

Answer to Problem 9.15E

The production department’s planning budget is $254,500

Explanation of Solution

Prepare production department’s planning budget

Particulars	Amount

Budget labor hours (a)	8000 hours
Direct labor ($15.80(a))	$126,400
Indirect labor ($8,200+($1.60×(a)))	$21,000
Utilities ($6,400+($0.80×(a)))	$12,800
Supplies ($1,100+($0.40×(a)))	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$52,600
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$26,900

Total expenses	$254,500

2.

To determine

Prepare production department’s flexible budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

2.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget is $264,180

Explanation of Solution

Prepare production department’s flexible budget

Particulars	Amount

Actual labor hours (a)	8400 hours
Direct labor ($15.80(a))	$132,720
Indirect labor ($8,200+($1.60×(a)))	$21,640
Utilities ($6,400+($0.80×(a)))	$13,120
Supplies ($1,100+($0.40×(a)))	$4,460
Equipment depreciation ($23,000+($3.70×(a)))	$54,080
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$27,660

Total expenses	$264,180

3.

To determine

Prepare production department’s flexible budget performance report, including both spending and activity variances.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

3.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget performance report shows the net revenue and spending variances is $1,310(U) and activity variance is $9,680(U)

Explanation of Solution

Prepare flexible budget performance report.

Particulars	Actual results	Spending variances	Flexible budget	Activity variances	Planning budget

Labor hours (a)	8400 hours		8400 hours		8000 hours
Direct labor ($15.80(a))	$134,730	$2,010(U)	$132,720	$6,320(U)	$126,400
Indirect labor ($8,200+($1.60×(a)))	$19,860	$1,780(F)	$21,640	$640(U)	$21,000
Utilities ($6,400+($0.80×(a)))	$14,570	$1,450(U)	$13,120	$320(U)	$12,800
Supplies ($1,100+($0.40×(a)))	$4,980	$520(U)	$4,460	$160(U)	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$54,080	$0	$54,080	$1,480(U)	$52,600
Factory rent	$8,700	$330(U)	$8,400	$0	$8,400
Property taxes	$2,100	$0	$2,100	$0	$2,100
Factory administration (11,700+($1.90×(a)))	$26,470	$1,190(F)	$27,660	$760(U)	$26,900

Total expenses	$265,490	$1,310(U)	$264,180	$9,680(U)	$254,500

4.

To determine

Aspects of flexible which should be brought to management’s attention.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

4.

Expert Solution

Answer to Problem 9.15E

The unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 are major concern of the management.

Explanation of Solution

The computation of unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 this made the management more concerned about the changes in the values. As variance is the difference in value which arises when actual figure and estimated or budgeted figure occurs major difference.

Answer 6

Chapter 9, Problem 9.15E

1.

To determine

Prepare production department’s planning budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

1.

Expert Solution

Answer to Problem 9.15E

The production department’s planning budget is $254,500

Explanation of Solution

Prepare production department’s planning budget

Particulars	Amount

Budget labor hours (a)	8000 hours
Direct labor ($15.80(a))	$126,400
Indirect labor ($8,200+($1.60×(a)))	$21,000
Utilities ($6,400+($0.80×(a)))	$12,800
Supplies ($1,100+($0.40×(a)))	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$52,600
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$26,900

Total expenses	$254,500

Answer 7

Chapter 9, Problem 9.15E

1.

To determine

Prepare production department’s planning budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

Answer 8

1.

Expert Solution

Answer to Problem 9.15E

The production department’s planning budget is $254,500

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Prepare production department’s planning budget

Particulars	Amount

Budget labor hours (a)	8000 hours
Direct labor ($15.80(a))	$126,400
Indirect labor ($8,200+($1.60×(a)))	$21,000
Utilities ($6,400+($0.80×(a)))	$12,800
Supplies ($1,100+($0.40×(a)))	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$52,600
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$26,900

Total expenses	$254,500

Answer 13

2.

To determine

Prepare production department’s flexible budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

2.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget is $264,180

Explanation of Solution

Prepare production department’s flexible budget

Particulars	Amount

Actual labor hours (a)	8400 hours
Direct labor ($15.80(a))	$132,720
Indirect labor ($8,200+($1.60×(a)))	$21,640
Utilities ($6,400+($0.80×(a)))	$13,120
Supplies ($1,100+($0.40×(a)))	$4,460
Equipment depreciation ($23,000+($3.70×(a)))	$54,080
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$27,660

Total expenses	$264,180

Answer 14

2.

To determine

Prepare production department’s flexible budget.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

Answer 15

2.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget is $264,180

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Prepare production department’s flexible budget

Particulars	Amount

Actual labor hours (a)	8400 hours
Direct labor ($15.80(a))	$132,720
Indirect labor ($8,200+($1.60×(a)))	$21,640
Utilities ($6,400+($0.80×(a)))	$13,120
Supplies ($1,100+($0.40×(a)))	$4,460
Equipment depreciation ($23,000+($3.70×(a)))	$54,080
Factory rent	$8,400
Property taxes	$2,100
Factory administration (11,700+($1.90×(a)))	$27,660

Total expenses	$264,180

Answer 20

3.

To determine

Prepare production department’s flexible budget performance report, including both spending and activity variances.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

3.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget performance report shows the net revenue and spending variances is $1,310(U) and activity variance is $9,680(U)

Explanation of Solution

Prepare flexible budget performance report.

Particulars	Actual results	Spending variances	Flexible budget	Activity variances	Planning budget

Labor hours (a)	8400 hours		8400 hours		8000 hours
Direct labor ($15.80(a))	$134,730	$2,010(U)	$132,720	$6,320(U)	$126,400
Indirect labor ($8,200+($1.60×(a)))	$19,860	$1,780(F)	$21,640	$640(U)	$21,000
Utilities ($6,400+($0.80×(a)))	$14,570	$1,450(U)	$13,120	$320(U)	$12,800
Supplies ($1,100+($0.40×(a)))	$4,980	$520(U)	$4,460	$160(U)	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$54,080	$0	$54,080	$1,480(U)	$52,600
Factory rent	$8,700	$330(U)	$8,400	$0	$8,400
Property taxes	$2,100	$0	$2,100	$0	$2,100
Factory administration (11,700+($1.90×(a)))	$26,470	$1,190(F)	$27,660	$760(U)	$26,900

Total expenses	$265,490	$1,310(U)	$264,180	$9,680(U)	$254,500

Answer 21

3.

To determine

Prepare production department’s flexible budget performance report, including both spending and activity variances.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

Answer 22

3.

Expert Solution

Answer to Problem 9.15E

The production department’s flexible budget performance report shows the net revenue and spending variances is $1,310(U) and activity variance is $9,680(U)

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Prepare flexible budget performance report.

Particulars	Actual results	Spending variances	Flexible budget	Activity variances	Planning budget

Labor hours (a)	8400 hours		8400 hours		8000 hours
Direct labor ($15.80(a))	$134,730	$2,010(U)	$132,720	$6,320(U)	$126,400
Indirect labor ($8,200+($1.60×(a)))	$19,860	$1,780(F)	$21,640	$640(U)	$21,000
Utilities ($6,400+($0.80×(a)))	$14,570	$1,450(U)	$13,120	$320(U)	$12,800
Supplies ($1,100+($0.40×(a)))	$4,980	$520(U)	$4,460	$160(U)	$4,300
Equipment depreciation ($23,000+($3.70×(a)))	$54,080	$0	$54,080	$1,480(U)	$52,600
Factory rent	$8,700	$330(U)	$8,400	$0	$8,400
Property taxes	$2,100	$0	$2,100	$0	$2,100
Factory administration (11,700+($1.90×(a)))	$26,470	$1,190(F)	$27,660	$760(U)	$26,900

Total expenses	$265,490	$1,310(U)	$264,180	$9,680(U)	$254,500

Answer 27

4.

To determine

Aspects of flexible which should be brought to management’s attention.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

4.

Expert Solution

Answer to Problem 9.15E

The unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 are major concern of the management.

Explanation of Solution

The computation of unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 this made the management more concerned about the changes in the values. As variance is the difference in value which arises when actual figure and estimated or budgeted figure occurs major difference.

Answer 28

4.

To determine

Aspects of flexible which should be brought to management’s attention.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

Answer 29

4.

Expert Solution

Answer to Problem 9.15E

The unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 are major concern of the management.

Answer 30

4.

Expert Solution

Answer 31

4.

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

The computation of unfavorable activity variance is $9,680 and an unfavorable spending variance is $1,310 this made the management more concerned about the changes in the values. As variance is the difference in value which arises when actual figure and estimated or budgeted figure occurs major difference.